President #10: Bill Clinton (1993-2001)

How did balancing the budget impact Social Security reform? How did you deal with the lack of urgency in reforming Social Security?

By the time I started my first term, Social Security had changed what it meant to be old in America. It had lifted the elderly out of poverty and given them something to look forward after a lifetime of work. Because of it, we were a healthier and more unified America, and we had fullfilled our commitment to our elderly population. [1] But we also were suffering from several years of large deficits and the realities of a Social Security system that was on an unsustainable path due to an age-driven demographic shift.[2] We did not want to structurally change one of the most successful policy devices in the history of the United States, but we had to make changes to ensure that our commitment to retirement benefits continued indefinitely.

I was able to convince Congress to increase the payroll tax cap to the top 10 to 12% of earners but that alone wasn’t enough. We still had a looming long-term crisis in the demographic shift.[3] This problem would not be solved through the 1983 bipartisan solution under Reagan or as small a change as discussed above.[4] We needed significant reform.

In 1994, we passed into law the Social Security Independence and Program Improvements Act which made the Social Security Administration an independent body to protect it from federal budget foibles and to restore public confidence in the system.[5] We followed this effort with a 1996 signing of H.R. 3161, which increased the Social Security earnings limit to allow more elderly people to work while still reaping full retirement benefits.[6]

Each of these steps was a part of a greater, bipartisan effort towards eliminating the massive deficit we inherited through a balance of fiscal responsibility and commitment to our promises, chief of which is Social Security. In 1998, I was able to announce that the federal deficit, “once so incomprehensibly large that it had 11 zeroes – will be, simply, zero.”[7] This was an unprecedented opportunity to fix the long-term problems of Social Security, so I pledged: “Save Social Security first.”[8]

Before we would do anything else with the resulting surplus, we would fix Social Security. In order to do so, we held several nonpartisan forums to encourage debate, a White House conference, and an attempt to craft groundbreaking, bipartisan legislation to prepare Social Security for the 21st century.[9] It was our duty to save Social Security now that we finally ended the twelve-year reign of terror of paralyzing deficits.

Not only does social security mirror the most American values of community, it is capable of erasing all of the progress we made if we don’t put it on a sustainable path. As the old saying goes, “You don’t wait for a rainy day to fix the roof.” Though it may be “very sunny outside… on this sunny day we should deal with Social Security”[10] The consequences of not acting were grave.

We built our reform efforts on several principles. First, we wanted to make sure to keep the system universal and fair. Second, we wanted to strengthen the system for the 21st century. Third, we wanted to provide benefits that people could count on. Last, we wanted to accomplish all of these things with the same fiscal responsibility that we reduced the deficit with.[11] In addition, we wanted to increase private savings through expanding the availability and attractiveness of IRA’s and improving employer pensions.[12] I tried not to get more specific than that because I wanted reforms to have a chance to grow out of bipartisan debate, instead of my position taking the focus off of them.[13]

Still, these efforts proved fruitless when put to vote in Congress and we lost our unprecedented opportunity to create meaningful reform for Social Security.[14] We tried to push past the “third rail” of American politics and have serious debates about changing the system, but we were unable to enact meaningful change at the turn of the century.[15] Putting long-run interests such as Social Security ahead of short-term politics proved infeasible.

Editor's Note

President Clinton was able to accomplish that which his predecessors had not been able to do for several decades: usher in a period of peacetime government surpluses. This great achievement cleared the agenda for any number of possible governmental actions, but it also decreased the sense of urgency in needing to deal with Social Security. Thus, though Clinton insistently urged Congress and the American public to save Social Security now, his focus on a long-term approach was thwarted by the lack of a short- or long-term crisis looming, and by the short-term politics empowered by more current issues.

Clinton also crossed traditional Democratic party lines by engendering a period of small government and encouraging above all fiscal responsibility. Thus, his focus remained on cutting costs and raising revenue. This exposed benefits to potential cuts, establishing a precedent that would last until president Obama, and working towards a more bi-partisan approach. His work on easing polarization, however, would quickly dissipate with the presidency of George W. Bush.


[1] Remarks by the President in Addressing the Future of Entitlements Conference, Bryn Mawr, Pennsylvania, December 13, 1993. Retrieved from http://www.ssa.gov/history/clntstmts.html
[2] Ibid
[3] Ibid
[4] Ibid
[5] Remarks on Signing the Social Security Independence and Program Improvements Act of 1994. Retrieved from http://www.ssa.gov/history/clntstmts.html
[6] President’s Statement on Signing H.R. 3161, March 29, 1996. Retrieved from http://www.ssa.gov/history/clntstmts.html
[7] Excerpts from President’s 1998 State of the Union Address, January 27, 1998. Retrieved from http://www.ssa.gov/history/clntstmts.html
[8] Ibid
[9] Ibid
[10] Remarks by the President on Social Security, February 9, 1998. Retrieved from http://www.ssa.gov/history/clntstmts.html
[11] Address by the President to a National Forum on Social Security, April 7, 1998. Retrieved from http://www.ssa.gov/history/clntstmts.html
[12] Ibid
[13] Ibid
[14] Radio Address of the President to the Nation, September 19, 1998. Retrieved from http://www.ssa.gov/history/clntstmts.html
[15] Ibid